Chief executive Mike Coupe said the supermarket would help suppliers become more efficient ©PA Images
Chief executive Mike Coupe said the supermarket would help suppliers become more efficient ©PA Images

Sainsbury’s to ‘mitigate costs within supply chain’

3 May 2017

Supermarket retailer Sainsbury’s will work with suppliers to reduce the impact of wholesale price increases on consumers, said chief executive Mike Coupe.

The supermarket announced its before tax profit decreased by 8.2% in the year to March, from £548m in 2015/16 to £503m last year.

In a report Sainsbury’s said the market had initially been stronger than expected after the UK voted to leave the EU, but that the impact of the devaluation of the pound and higher oil prices had started to impact the price of food, merchandise, clothing and fuel.

“After more than two years of deflation, food and fuel prices started to rise towards the end of our financial year, driven by the devaluation of sterling and commodity price increases,” the supermarket said.

Coupe told the BBC it would work with suppliers to “mitigate costs within our supply chain”. Speaking to Radio 4’s Today Programme, Coupe said the retailer would “reduce the impact of cost price increases on our customers by making sure that we limit the impact on the retail prices that we sell”.

“We do that by helping our suppliers become more efficient and also looking at our own business as to how we can reduce costs,” he added.

Coup also said the firm would not reduce pack sizes of its own-brand products to keep prices low. “We can’t mitigate for what branded suppliers may or may not do… Within Sainsbury’s we find appropriate pack sizes that work for our customers and we wouldn’t actively undertake [pack size reduction].”

The firm said if exceptional costs were stripped out, retail underlying profit before tax fell by 1.4% on the previous financial year to £626m. This reflected investments made, lower like-for-like sales and cost inflation.

Revenue increased 12.7% to £29.112bn, up from £25.829bn.

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